What's new in exploration
SEG is low quantity, high quality. The Society of Exploration Geophysicists held its annual Meeting and Exhibition in early October in Salt Lake City, Utah. During the past five years, attendance at the Meeting has been in the 8,000 to 11,000 range. Attendance this year, at 5,700, was at the lowest it has been since the Meeting was held in Los Angeles, eight years ago. While trying to avoid the type of lame excuses given for daily stock market fluctuations, there were some bona fide reasons for the crummy turnout. Salt Lake City is not an oilfield town; so, as expected, local input was nil. Also, many foreign delegates were unable to clear the new post 9/11 visa procedures, which can take months. In addition, we could use a better Committee of Oilfield Show Scheduling: IADC, SPE and SEG were all back-to-back. Anyone who had attended IADC, SPE, or both was fairly worn out and needed to return to job and family. On the plus side, kudos to SEG for a well-organized show. Although lacking in quantity, the delegates were of high quality. The technical portion was good, featuring 950 presentations – a record – and were well attended. The venue was great. Salt Lake City is gorgeous. Its reputation for good weather is justified, and the Salt Palace is the coziest place anywhere to hold a show, with no time wasted getting around. And for reasons unknown, geophysicists throw better parties than geologists, drillers or pumpers. A noteworthy presentation was found in the session entitled Recent Advances and the Road Ahead. Rodney Calvert of Shell gave an enlightening talk on 4D seismic. A tongue-in-cheek question came at the end when someone commented “4D only shows us the oil that's been produced.” The implication being that what we want to see is the oil that remains. Calvert's answer was to shoot and shoot often. He suggested sparse acquisition techniques, perhaps use of a (standby) field vessel for cheap acquisition, and small patch shooting – all of which would allow the shoot often approach. Notwithstanding the good show, most exhibitors said business in the field was mediocre to lousy. This continues the oil company spending trend of perverse pessimism against all odds; namely, despite several months of high oil and gas prices, and signs that prices will remain high in coming months, be patient, show a little faith: Things will get worse. Blowhole amore. At one of the parties, in a discussion with a fellow from a seismic airgun manufacturer, the topic turned to cetacean (whales, marine mammals) monitoring, how it appears to be a growth industry, and how it might affect the seismic industry. I said that from what I've read and heard, there's a great deal of “may be, might be, could be,” in the research. For example, is a slow startup the best way to gently chase away marine mammals? He replied, “I wouldn't knowingly want to harm marine mammals, but how does one know? On a recent shoot, there was a whale pod that seemed quite happy, occasionally jumping out of the water. And they were following our vessel.” I related a story about my teaching days, how male students would attach a very low-frequency noise-generating device to their car mufflers. Long before anyone else could hear it, adolescent girls would suddenly sit upright, eyes roaming, looking out the window at the horizon. Minutes later, I could detect the telltale sound of thumpada – thump – thumpada at about 30 Hz. Remarkable, I recall thinking, how young girls could detect this sound at a much greater distance, and with much greater interest, than could I or any male. I also recalled a TV science show, where they stated that a male blue whale could emit low-frequency whale-song that females could hear hundreds of miles away. “What was the size of the airguns you were using?” I asked. “They were big boys, up to 1,000 cu. in.,” he replied. “Ahh, lower frequencies,” I said. “Maybe it's all the same thing: sexual. Could you tell if the jumping, following whales were female?” I asked. At that, we could only laugh. But it did epitomize how government and industry are swimming around a fledgling understanding of cetacean psyche. Merger machinations. After having just paid $7 million for the privilege of nixing the deal with PGS, Veritas bought Calgary-based Hampson-Russell Software Services. This deal, however, is the proverbial marriage made in heaven. Dan Hampson and Brian Russell left Veritas in 1987 to form their own company. Also, Veritas was already using some of Hampson-Russell's software before the buyout. You can't get a better fit. In other seismic merger news, CGG issued what is the most cryptic press release I've ever seen, comprising just four sentences, yet speaking volumes for what it doesn't say. “CGG announces that it has accumulated 7.51% of the outstanding shares of PGS in open market purchases. As a leading seismic company, it is CGG's long term objective to work toward a consolidation in the seismic industry. CGG's exposure to PGS is limited to its holding of PGS shares. CGG wishes to express support for the PGS board proposal announced 25th September 2002 by the Umoe Group...” First, the stated support for the Umoe Group, an investment firm that owns 12.5% of PGS, means that CGG supports a complete restructuring of PGS. A new board was indeed elected September 27th, with Jens Ulltveit-Moe, owner of Umoe Invest AS, as the new PGS Chairman. Whether there has been discussion between CGG and Ulltveit-Moe is not known. Second, it doesn't say when the shares were accumulated; but sources say that they were acquired only recently. Lingering questions are why PGS is still resisting CGG's advances, and will the new board change that? Finally, although this could be viewed as a mere investment, the second statement clearly implies some sort of desire for merger. Either way, the fact that PGS stock is down more than 90% over the past six months makes it a good buy. Adding to this rapidly changing situation, PGS, under its new management, has agreed to sell its production services division to Petrofac Ltd., an engineering and construction contractor serving refining, natural gas and petrochemical industries. Petrofac will pay about $50 million, including the assumption of $5 million in debt.
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